Why in the world...would I NOT own the top companies in the world? JPMorgan’s Kelly Says Only a Bear-Market ‘Shock’ Can Upend Tech https://finance.yahoo.com/news/jpmorgan-kelly-says-only-bear-113144731.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- The outsized sway of technology giants over US stocks is likely to persist, absent a major market rout along the lines of what investors endured in 2022, says JPMorgan Asset Management’s David Kelly. The firm’s chief global market strategist is among Wall Street pros who expect earnings growth in the S&P 500 Index will broaden beyond the tech behemoths by year-end. But in his view, it likely won’t be enough to close the wide performance gap between those megacap shares and the rest of the US equity benchmark. That means an extreme blow to market sentiment would be needed to derail the flow of cash into the soaring Big Tech names that have led the market’s advance in 2024, said Kelly, whose firm manages about $3 trillion. Two years ago, for example, tech shares were crushed by the Federal Reserve’s aggressive tightening, and slumped more than the broader market. “When you have the next bear market, then I think the highest-flying equities are the ones that are going to be most beaten up as indeed they were in 2022,” Kelly said in an interview. “You have to have a shock to market sentiment in order to disrupt the pattern we’re seeing in terms of how people are deploying their money.” Big technology companies have been sitting atop the stock market for years, but their grip has never been as tight as it is now. A version of the S&P 500 that makes little distinction between Microsoft Corp. and Macy’s Inc. has trailed its cap-weighted peer by 10 percentage points this year, a record January-June underperformance, data compiled by Bloomberg show. Profit growth for the Big Tech stocks is largely expected to slow, while the remaining S&P 500 companies are poised to see earnings accelerate, in the view of many forecasters. Strategists at firms including Morgan Stanley and Bank of America Corp. have said that shift will help lift the rest of the stock market. Kelly anticipates that the narrowing earnings gap won’t be enough to dim the fervor around artificial intelligence any time soon. To be sure, for investors with a longer horizon, he does recommend seeking opportunities outside of Big Tech, given how stretched those stocks’ valuations have gotten. Take the S&P 500 Information Technology Index, which in June traded at 31 times expected profits in the next 12 months, compared with a multiple of 21 for the entire S&P 500. That 10-point gap is the widest since 2003, data compiled by Bloomberg show. “What I think is driving the market is this momentum psychology,” he said. “When you have a particular theme, just a few of those names in the theme seem to attract cash — and a slow change in the distribution of earnings is not really going to be noticed by markets or in investor psychology.” There are few signs, for now, of that momentum abating. Investors largely expect a soft landing, with solid economic data, the Fed on track to reduce rates and inflation easing. It’s a “boring” backdrop, Kelly said, adding that “boring is very good for markets.”" MY COMMENT YES......boring is good for the markets......and....normal. In addition I say......these big cap tech monster companies are going to be the MOST DOMINANT companies in the world for a long, long, time. I am talking about the BIG NAMES....AAPL, MSFT, GOOGL, NVDA, AMZN, and NVDA. I dont care....bear market....bull market....I want to own the best of the best in the stock markets and in the business world worldwide.
As to the general markets and the big cap tech stocks in particular. I would not be surprised if we see a little market pull back and weakness in the month of July......as we head to earnings late in July and into August. My feel for the markets right now....short term.....we are not seeing much excitement and it is a TIRED market that we are seeing. We have seen HUGE gains in the first half of the year and a little summer dip is perfectly acceptable......perhaps even past due. If this happens it is perfectly NORMAL.
HEY ZUKODANY Good old PLTR has been on a tear lately. UP by 22.7% over the past month. UP by 6.82% over five days. UP by 57% over the past six months. Thanks for the tip. It is not a huge part of my portfolio.....BUT....I am happy to own it and will continue to add shares here and there if it continues to look good. When I get the next chunk of money to invest for my sibling over the next few weeks.....I will add at least $10,000 to PLTR in the account.
I cant believe that I ended in the GREEN today....but I did by a small amount. When I looked about 15 minutes before the close NVDA was down over $2. It came back nicely in the last fifteen minutes......enough to pull me into the GREEN for my nine stocks....even though it was still down by $1.63 at the close. I also lost out to the SP500 today by 0.56%. All in all I am extremely happy to end the day in the GREEN. We move on to the short day tomorrow when the markets close at 1:00PM.
The markets today.....KILLER. S&P 500 Closes Above 5,500 in Record-Breaking Run: Markets Wrap https://finance.yahoo.com/news/asian-stocks-slip-treasuries-hit-223416541.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- Wall Street traders sent stocks to all-time highs as bond yields fell, with traders looking at prospects for Federal Reserve rate cuts after Jerome Powell cited signals the US is back on a disinflationary path. For the first time in its history, the S&P 500 closed above 5,500 to extend a blistering 2024 rally that has left analysts scrambling to update their targets. It was the gauge’s 32nd record this year. Tesla Inc. surged 10% to lead gains in megacaps, though Nvidia Corp. failed to gain traction. The Nasdaq 100 hit the 20,000 mark, also notching a record high. Equities have defied doomsayers amid solid corporate earnings, the artificial-intelligence mania and expectations that interest rates will decline in 2024. The lack of any meaningful pullback has given bulls conviction that the rally is sustainable. The S&P 500 will rally to new peaks by the end of the year as economic strength outweighs market risks, according to Lori Calvasina at RBC Capital Markets. She raised her year-end target to 5,700 from 5,300 — among the highest on Wall Street — despite the fact that the market has “gotten a bit ahead of itself.” “Our suspicion is that 2024’s economy will end up being strong enough to justify a strong move in the S&P 500 for the year as a whole,” Calvasina said. The record-setting surge in US equities, driven chiefly by American technology behemoths, is once again igniting comparisons to prior boom-and bust cycles on Wall Street. But parallels to the dot-com era and stock-market frenzies of the past are so far exaggerated, if history is any guide. While the S&P 500 has posted an 85% advance since 2019, even despite some drawdowns over the period, major bull runs of the 20th century dwarf that return. The US stock benchmark soared 220% in the last five years of the Internet bubble at the turn of the century, according to Bloomberg Intelligence data, and 238% in the same-period stretch of the Roaring Twenties. Deutsche Bank AG strategists expect US earnings to rise by an above-average 13% for the second quarter, driven by megacap growth and tech stocks. The outlook is for a sixth straight quarter of above average beats. However, the team led by Binky Chadha expects market reaction to be subdued as stocks have rallied in the run-up to the season. Data Tuesday showed job openings unexpectedly rose, interrupting a trend that underscored a slowdown in labor seen as key for Fed easing. Powell said there’s been a “substantial” move toward better balance between the supply of and demand for workers. He described the job market as strong, but said it is cooling off appropriately so. To Krishna Guha at Evercore, Powell’s comments were notably upbeat on inflation progress — while also incrementally careful on the balance of risks and employment. “There was no explicit signal on cuts, but these were assessments that would plausibly support a cut in September,” Guha said. Wall Street is now gearing up for a slew of economic data that will hit the tape on Wednesday — when the market closes early ahead of Thursday’s holiday. That’s ahead of the all-important US payrolls reading due Friday. Economists expect the report to show employers added about 195,000 payrolls in June and the unemployment rate held at 4%. To Jose Torres at Interactive Brokers, the next three months of inflation reports will be crucial for both investor sentiment and policymakers’ timing for turning dovish. “June will likely show continued disinflation, but the potential results for July and August are less clear, raising the question of how many months of favorable data are needed before the Fed moves,” he noted." MY COMMENT A KILLER stealth rally going on in the SP500 over the past few weeks. My prediction at the start of the year for....SP500 at 5800.....at year end.....is now looking like a shoe-in. Of course I just screwed the markets by saying that out loud.
Another day in the markets.....another mild and listless open for the markets. Same open we have seen for the past couple of weeks. At least all the averages are slightly in the GREEN at the moment. I like this little article. Why “Higher for Longer” Rates Haven’t Stopped Stocks Reality has proven rates at present levels aren’t toxic for stocks. https://www.fisherinvestments.com/e...higher-for-longer-rates-havent-stopped-stocks (BOLD is my opinion OR what I consider important content) "“Higher for longer” interest rates were supposed to be stocks’ albatross. But since October 2022, rates (short and long) have climbed with stocks. In our view, this illustrates fear over rates killing stocks is again overblown. The widespread belief that high rates are kryptonite for stocks stems from a textbook way to value securities: using current interest rates to discount future cash flows. The higher the rate, the lower those cash flows’ present value—at least in theory. Hence, rising rates supposedly hurt growth stocks like Tech more because, theoretically, much of their earnings are further in the future. When interest rates rise, the present value of those distant profits shrinks faster—or so the thinking goes. Problem is, this doesn’t regularly work in practice. Not for stocks generally nor Tech specifically. Exhibits 1 and 2 show the S&P 500 versus 3-month and 10-year Treasury yields, split for easier visualization into the generally rising rate period through the early 1980s and after. There are plenty of times besides the current cycle when stocks rose alongside rates—like in every bull market from 1954 to 1983. Exhibit 1: Rates Don’t Dictate Stocks’ Direction (1954 – 1983) Source: FactSet, as of 7/1/2024. S&P 500 price index and 3-month and 10-year Treasury yields, 1/4/1954 – 12/31/1983. Or, for example, see rising rates during 2015 – 2019 and 2004 – 2006—they didn’t forestall bull markets in Exhibit 2. Now, 2009 – 2019’s long bull market—and 2020 – 2021’s brief one—featured low rates overall, but they didn’t cause stocks’ liftoff. And the wiggles and waggles higher in those stretches don’t regularly coincide with market weakness. Regardless, pre-2008, before the low-rate era began, few would have batted an eye over stocks and rates moving upwards together. Exhibit 2: Rates Don’t Dictate Stocks’ Direction (1984 – 2024) Source: FactSet, as of 7/1/2024. S&P 500 price index and 3-month and 10-year Treasury yields, 1/3/1984 – 7/1/2024. As for higher rates being anathema to growth stocks, Exhibit 3 shows S&P 500 Tech sector relative returns against the fed-funds target rate. Again in previous cycles, purportedly “tighter” monetary policy didn’t stop Tech outperforming in 2015 – 2019 and 1994 – 1995. “Looser” policy in the early 2000s did nothing to stop Tech’s deflation. The mid-2000s’ rate hikes may seem to have stymied Tech, but this is mostly the aftermath of the Tech bubble—investors fought the last war throughout that value-led bull market. Regardless, there is no consistency: Rising rates weren’t auto bearish for Tech, nor were falling rates bullish. Exhibit 3: Or Growth Stocks’—Like Tech’s—Relative Returns Source: FactSet, as of 7/1/2024. S&P 500 Information Technology and S&P 500 total returns and fed-funds target rate, 12/31/1989 – 7/1/2024. That isn’t to say rates have no effect on stocks. In our view, aggressive Fed rate hikes contributed to 2022’s bear market—alongside soaring inflation, Russia’s Ukraine invasion, sanctions and energy price spikes, all amid global supply chain chaos. Those hikes started with surprise, as officials talked up “transitory” price increases and rates staying low beforehand. We think the combination weighed on sentiment, helping drive 2022’s mild bear market. Then fears went too far, setting up positive surprise. Rising rates can also disproportionately affect sectors reliant on them, like Real Estate, which is down -3.4% year-to-date, the only sector with negative returns. But for Tech? Generally cash-rich balance sheets in the sector make it more immune to rates, not less. And, increasingly, large Tech is quite profitable in the here and now—not just the far future. This brings us to the main reason why high and/or rising rates aren’t anything to fear. Stocks don’t move on them, but on surprise. In late 2022 and early 2023, markets had pre-priced widespread fear of rising rates’ impacts (along with a bevy of other worries). Many went so far as to expect a 1970s redux. The fear went too far, irrationally depressing expectations—and making positive surprise easier to attain. Rates never soared into the mid-teens like then, sitting instead at historically normal levels—which isn’t terrible. Nothing here looks all that unusual when you take a broader look. Exhibit 4: Rates Around Their Historical Average Source: FactSet, as of 7/1/2024. 3-month and 10-year Treasury yields, 1/4/1954 – 7/1/2024. Moreover, to say what may seem profane presently: There are some benefits from higher rates. One, savers are being rewarded more from interest income to the extent banks pass this through. Your emergency cash isn’t paying zero, which should discourage folks from seeking creative solutions to zero interest. Now, some also suggest high rates on cash and bonds are so attractive they will lure people out of stocks. But they aren’t in competition. For long-term investors, stocks trounce cash (and bond) returns—and are far better at staying ahead of inflation. The reality, in our view, is this simply means cash reserves aren’t return-free. Regaining some purchasing power after inflation’s spike is fine, but for many, that probably isn’t enough to reach their long-term financial objectives. Two, the higher bar for borrowers helps weed out speculative endeavors less likely to turn a profit down the line. To the degree this directs capital to more profitable projects, it lowers the likelihood of excesses building in the economy, extending expansion. Without excesses, there isn’t much reason for recession—its main purpose is to wring them out. Lastly, another ancillary benefit from higher rates: It likely cuts down on central bank experimentation. The low-rate era had many monetary policy institutions around the world get, shall we say, creative. From quantitative easing and negative interest rates to YCC and TLTROs, never mind haphazard one-off reactions with disastrous consequences. The results are questionable at best and, we have found, usually counterproductive. And at their worst: panic-inducing and severely disruptive, turning major financial problems (to be sure) into full-fledged crisis while deepening and prolonging recession—unnecessarily. When central banks are routinely undertaking large-scale extraordinary measures and unconventional policies because they find their typical toolkits lacking, the void of certainty that can leave may itself be destabilizing. Higher rates don’t guarantee a return to normal monetary policy operations—and less confusion—but we think they do make it more likely. And, in our view, boring central banking is better. Overall, for investors, we see the same rate fears recycled ad nauseum for two years lingering today. But reality continues proving better than expected—which is why stocks keep plowing ahead." MY COMMENT Any large well managed business will find ways to operate with impunity toward interest rates......low or high. The big cap tech companies have mountains of cash. They are certainly immune to rates if they choose to ignore them. If they wish....they can self fund anything they want to do. High rates can and do impact small business....but....small business is not the stock market. Few small businesses are included in the markets. The constant old platitudes that you hear being spouted by the media and others about the impact of higher rates....especially on the largest companies.....is simply not true. BOTTOM line....the markets are NOT the economy.
These little....short term....stories go together and both are good news for investors. US filings for jobless claims inch up modestly, but continuing claims rise for ninth straight week https://finance.yahoo.com/news/us-filings-jobless-claims-inch-124019788.html US private payrolls growth slows in June https://finance.yahoo.com/news/us-private-payrolls-growth-slows-122400554.html Treasury 10-Year Yield Falls After Soft Jobs Data https://finance.yahoo.com/news/asia-stocks-rise-p-500-221910701.html
After days of small gains and listless action the markets finally POPPED today. NVDA was up by 4.57%. Accordingly since I own a lot of it....my account was strongly in the green for my nine stocks. I had only two stocks in the RED today.....HD and AMZN. I also beat the SP500 today by 1.44%. A very nice end to a very short market day.
The BIG close today. S&P 500, Nasdaq hit fresh highs as stocks head into holiday with a bang https://finance.yahoo.com/news/stoc...-head-into-holiday-with-a-bang-170158459.html (BOLD is my opinion OR what I consider important content) "Stocks ended Wednesday's holiday-shortened session on a high note with both the S&P 500 and Nasdaq notching fresh records following weak economic data that fueled investor optimism for a September rate cut. The S&P 500 (^GSPC) rose about 0.5% to hit a new high of 5,537 after the benchmark ended Tuesday above 5,500 for the first time. The tech-heavy Nasdaq Composite (^IXIC) also moved higher, finishing the day up around 0.9%, while the Dow Jones Industrial Average (^DJI) dropped roughly 0.1%. The moves come ahead of the stock market's shutdown on Thursday to mark the Independence Day holiday. Weak economic data released Wednesday cemented hopes for an interest-rate cut after the US services sector contracted in June at the fastest pace in four years. Meanwhile, private-sector job creation slowed for a third straight month with the US adding just 150,000 new jobs in June, below the 165,000 Wall Street had expected. Pay gains for both job stayers and job changers also slowed. Traders are now pricing in 74% odds of a move lower in September, according to CME's FedWatch tool. Yields also dropped on the results with the 10-year (^TNX) Treasury yield falling roughly 8 basis points to trade near 4.35%. In other employment news, jobless claims inched up but remained at historic lows. According to the Labor Department, jobless claims for the week ending June 29 rose by 4,000 to 238,000. The data comes just ahead of the key June jobs report release on Friday." MY COMMENT Looks like LORI made the right move by holding on to all of her stocks. The PROBABILITY is that the stocks will beat her 3% transfer fee. Today starts her off on the right foot. We are now in the middle of an EPIC year. If this can continue it will be BIG GAINS for the SP500, the NASDAQ and many investors in big tech this year.
HAPPY FORTH OF JULY.....TO ALL THE AMERICANS ON HERE. Look Past the Debate Falling uncertainty is a powerful election year tailwind. https://www.fisherinvestments.com/en-us/insights/market-commentary/look-past-the-debate (BOLD is my opinion OR what I consider important content) "Editors’ Note: MarketMinder prefers no political party nor any candidate. We assess developments for their potential economic and market impact only. The first presidential debate is in the books, and we aren’t going to pile on. Not on either side. And there is a simple reason for this, beyond our steadfast political neutrality: Stocks don’t pick sides. They are party blind, and regardless of who wins, the tailwind of falling political uncertainty seems to be gathering. We know ours is a rare take. With all the buzzing over potential backroom handwringing and perhaps even a candidate swap, things look chaotic. Uncertain. But that is the point. Election years always start with uncertainty, which can weigh on sentiment. But it melts away as the nominees become clear and the general election race comes into focus. Eventually we get a winner, and as markets price this in, sentiment usually rallies around the victor regardless of party. Markets just like having the clarity that comes with knowing the outcome. It is tempting to cast the debate and its potential implications as a wildcard. Yet all elections bring wildcards big or small. Plenty of bull market election years have had the proverbial “October surprise.” Early frontrunners have fallen. Third-party candidates have muddied the waters. Talk of a contested convention isn’t new, either. So in full context, we are hard-pressed to see that much truly changed Thursday. After all, dissatisfaction with these candidates and discussion of President Biden’s age has been running all year. And, for all the talk of a change, taking the baton this late in the race is a tall order. Then, too, Biden’s speech in North Carolina Friday suggests he has no intention of leaving voluntarily. Regardless, even if we do get a new name on the ticket, we are still looking at a tight race that comes down to a handful of swing states. Hence, the race still hinges on technicalities like campaign strategy, grassroots machinery and turnout. These are unknowns, but they will become known. State- and county-level polls will come into focus. We will see which campaign gets more ads on TV in battleground areas and how effective their reach is. If there is a drop-in candidate, America will get to know him or her, and the party machineries will roll on, doing their thing. Society’s opinions of both current candidates—and both parties—are pretty hardened. But markets will get a bead on which side inspires more enthusiasm and, therefore, likely turnout. True, markets don’t like rising uncertainty. But they love falling uncertainty, and that is what we will get as 2024’s second half unfolds. Not only will markets pre-price the presidential outcome, but they will see how Congress shakes out and how much power the presidential winner will have. Clarity will come on all fronts. This isn’t unique to 2024—it happens every election year, which is why the vast majority are positive, with back-end loaded returns. As Exhibit 1 shows, year four has the second-best average return and second-highest frequency of positive returns of the four-year electoral cycle. And the good times come regardless of the winner’s party. Exhibit 1: Presidential Term Anomaly Source: Global Financial Data, Inc., as of 1/10/2024. S&P 500 total returns. Now, most of the time, gains come late—as that uncertainty falls. But this year started off with relatively less uncertainty than usual, with two known candidates and a primary process that was little more than a formality. We suspect this is one reason for the unusually strong start for election-year returns. But given how much room there still is for uncertainty to fall from here, there should be plenty of gas left in the market’s tank. And there is nothing about a good first half that points to weakness later. Quite the contrary. Election year first halves have posted 10% or greater gains eight times since 1928. The second half was also positive seven times. As this year progresses, we will gain clarity on who is set to be the next president, how the next Congress looks and what the likelihood of big legislation is. As that gradually happens, the falling uncertainty should lift markets." MY COMMENT YES....we will get clarity and business will have no choice but to adjust and move on.....as usual. I have no doubt which policies are best for business, the economy, and the country. But...I will not get into that here.
You may not like it.....but....welcome to the world of NORMAL mortgage rates. AND.....NO these rates are NOT "stubbornly high". They are actually in the normal range for mortgage rates that most of us over age 40 have lived with all our lives. What is....highly ABNORMAL....is the rates in the high 2% to low 4% range that we saw recently. Those low rates were a once in a lifetime opportunity for home buyers and people that did.....or..... should have been.... refinancing. https://www.foxbusiness.com/economy/mortgage-rates-july-3-2024 Mortgage rates climb to 6.95% Mortgage rates up again, remaining stubbornly high amid housing affordability crisis
I dont own this stock.....TSLA.....and have no plans to own it in any of the accounts that I manage. But....this certainly has to rank as one of the big....turn-around....stories of the past 2-3 months. Tesla short sellers lost $3.5 billion in two days of trading after deliveries report https://www.cnbc.com/2024/07/04/tes...-billion-in-two-days-after-q2-deliveries.html Key Content Tesla stock jumped this week, after a better-than-expected deliveries report for the second quarter. Short sellers, betting on a drop in the stock, got hammered.....BOOM. Investors will learn more about Tesla’s fundamentals, when earnings come out in the near future. and Tesla shares boomed by 73% after bottoming in April. The stock is now just $2 shy of wiping out its loss for the year. I am a huge fan of ELON MUSK as a business person and driver of innovation I am very glad to see him having success lately. BUT....I still will not buy TSLA stock.
